Suit by Wal-Mart Cleaners Asserts Rackets Violation

By STEVEN GREENHOUSE

Published: November 11, 2003

Lawyers filed a class-action suit against Wal-Mart yesterday in New Jersey, saying it violated federal racketeering laws by conspiring with cleaning contractors to cheat immigrant janitors out of wages.

The suit, in Federal District Court in Newark, seeks to represent thousands of workers who washed and waxed floors nightly in Wal-Mart department stores. It says the company and its contractors violated RICO, the Racketeering Influenced Corrupt Organizations Act, by conspiring not to pay the workers overtime. The suit says the cleaners at hundreds of stores generally earned $325 to $500 for working seven nights a week, usually for 56 hours or more each week.

The case was filed 18 days after federal agents raided 60 stores in 21 states to round up 250 janitors described as illegal immigrants. Last week, executives at Wal-Mart, the world's largest retailer, acknowledged that federal prosecutors had sent a target letter saying the company faced a grand jury investigation over the immigrants.

''This case is about the most powerful and richest company in the world taking obscene advantage of the poorest and most vulnerable people in the world,'' said a lawyer filing the suit yesterday, James L. Linsey.

In the suit, Wal-Mart and its contractors are also accused of failing to make required workers' compensation and Social Security payments and failing to withhold federal payroll taxes. Wal-Mart and its contractors are also accused of mail fraud, wire fraud, bringing in and harboring illegal immigrants and engaging in a ''pattern of racketeering activity'' to prevent officials from enforcing wage and immigration laws.

''Wal-Mart and the contractor defendants,'' the suit says, ''have engaged in and profited from a nationwide fraudulent scheme designed to defraud the United States government through the nonpayment of taxes and injure and exploit the plaintiffs and those similarly situated through wide-scale violation of protection of federal and state labor and employment law.''

A spokeswoman for the company, Mona Williams, said, ''We do not feel there is merit to the plaintiffs' claim and plan to move quickly for the dismissal.''

Executives of Wal-Mart, of Bentonville, Ark., have repeatedly said since the raids on Oct. 23 that executives of the chain did not know about the illegal immigrants or the contractors' not paying time and a half for overtime. The executives said they had a strict policy that contractors not hire illegal immigrants.

The plaintiffs say that Wal-Mart and the contractors were in effect joint employers and that Wal-Mart is therefore responsible for the misdeeds.

Maximino Méndez, 19, a Mexican who worked in a Wal-Mart in Old Bridge, N.J., said he was one of the nine plaintiffs in the suit because ''Wal-Mart violated our rights.'' Mr. Méndez said he worked every night for eight months, earning $325 for 60-hour weeks and never received time and a half for overtime. He faces deportation after being seized on Oct. 23.

Gilberto Garcia, who filed a suit last week in Superior Court in Freehold, N.J., on behalf of nine Mexican janitors, said he had withdrawn that suit and merged it into the new one. The new suit maintains the claim in the first suit that Wal-Mart and its contractors violated state antidiscrimination laws by treating the janitors worse because of their origins.

The case resembles a suit that the Mexican American Legal Defense and Educational Fund and private lawyers brought against three supermarket chains in California two years ago, accusing them of conspiring with cleaning contractors to deprive 2,100 janitors of overtime pay.

In an unrelated case, a judge in Superior Court in Alameda County, Calif., granted class certification on Friday to more than 100,000 Wal-Mart workers in California after lawyers said the company did not give them their full rest and meal breaks and did not pay them when they worked off the clock.